EXHIBIT 99.1
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
The following pro forma consolidated financial information is based on the historical financial statements of BancTec, Inc. (“BTI”) and BancTec Japan (“BTJ”), and reflects the pro forma effects of the Sale of BTJ (“Sale”). Relevant information regarding the Sale, which became effective on November 27, 2002, was provided in Item 2 of this filing.
The pro forma consolidated balance sheet as of September 30, 2002, was prepared as if the Sale had occurred on that date. The pro forma consolidated statements of income for the year ended December 31, 2001, and the nine-month period ended September 30, 2002, were prepared as if the Sale had occurred on January 1, 2001. The deferral of any portion of the Sale proceeds has not been finally determined and such determination may change the ultimate financial results.
In the opinion of management, the pro forma financial information presented is not necessarily indicative of the results that would have occurred for the periods presented. The pro forma financial information should be read in conjunction with the historical financial statements of BTI for the year ended December 31, 2001.
1
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2002
(UNAUDITED — AMOUNTS IN THOUSANDS)
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| Less |
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| BancTec, |
| BancTec |
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| Pro Forma |
| Pro Forma |
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| Inc. |
| Japan |
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| Adjustments |
| Consolidated |
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Current Assets: |
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Cash and cash equivalents |
| $ | 33,417 |
| $ | 4,811 |
| (1 | ) | $ |
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| $ | 28,606 |
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Accounts receivable |
| 61,825 |
| 7,234 |
| (2 | ) | 68 |
| 54,659 |
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Inventories |
| 40,891 |
| 9,104 |
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| 31,787 |
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Prepaid expenses |
| 8,056 |
| 1,961 |
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| 6,095 |
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Total current assets |
| 144,189 |
| 23,110 |
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| 68 |
| 121,147 |
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Property, Plant & Equipment, net |
| 62,988 |
| 4,641 |
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| 58,347 |
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Goodwill |
| 48,336 |
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| 48,336 |
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Other Assets |
| 20,472 |
| 6,437 |
| (2,3,4 | ) | — |
| 14,035 |
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Total Assets |
| $ | 275,985 |
| $ | 34,188 |
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| $ | 68 |
| $ | 241,865 |
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Current Liabilities: |
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Revolving credit facilities |
| $ | 9,800 |
| $ |
| $ |
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| $ | 9,800 |
| |||
Trade accounts payable |
| 17,051 |
| 3,800 |
| (2 | ) | 1,444 |
| 14,695 |
| ||||||
Other accrued expenses & liabilities |
| 47,696 |
| 3,541 |
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| 44,155 |
| ||||||
Deferred revenue |
| 57,934 |
| 1,551 |
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| 56,383 |
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Income taxes |
| 2,666 |
| 45 |
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| 2,621 |
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Total current liabilities |
| 135,147 |
| 8,937 |
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| 1,444 |
| 127,654 |
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Long-Term Debt, less current maturities |
| 299,173 |
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| (1 | ) | (82,500 | ) | 216,673 |
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Other Liabilities |
| 38,040 |
| 4,835 |
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| 33,205 |
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Mandatory Redeemable Preferred Stock-Series A |
| 14,343 |
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| 14,343 |
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Stockholders’ Deficit: |
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Series B convertible preferred |
| 7,831 |
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| 7,831 |
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Common stock |
| 170 |
| 2,279 |
| (3 | ) | 2,279 |
| 170 |
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Class A common |
| 12 |
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| 12 |
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Subscription stock warrants |
| 3,726 |
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| 3,726 |
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Additional paid-in capital |
| 131,942 |
| 1,104 |
| (3 | ) | 1,104 |
| 131,942 |
| ||||||
Accumulated deficit |
| (345,180 | ) | 17,595 |
| (1,4 | ) | 78,303 |
| (284,472 | ) | ||||||
Accumulated other comprehensive loss |
| (9,219 | ) | (562 | ) | (4 | ) | (562 | ) | (9,219 | ) | ||||||
Total stockholders’ deficit |
| (210,718 | ) | 20,416 |
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| 81,124 |
| (150,010 | ) | ||||||
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Total Liabilities & Stockholders’ Deficit |
| $ | 275,985 |
| $ | 34,188 |
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| $ | 68 |
| $ | 241,865 |
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The accompanying notes are an integral part of this financial statement
2
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
NOTES TO THE PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2002
(UNAUDITED — AMOUNTS IN THOUSANDS)
1. These adjustments reflect the receipt of net adjusted Sales proceeds totaling $82,500, and the application of those proceeds in payment of the Subordinated Unsecured Sponsor Notes.
2. This adjustment represents the elimination of BTJ’s net intercompany balances owed to other BTI affiliates totaling $1,376, which were included in BTJ’s accounts receivable and trade accounts payable balances as of September 30, 2002,
3. These adjustments reflect the elimination of BTJ’s common stock and additional paid-in capital balances as of September 30, 2002, since such balances were already properly eliminated in the BTI amounts.
4. This adjustment represents the elimination of BTJ’s accumulated retained earnings, which is already included in the BTI amount, and the addition of the gain associated with the Sale totaling $60,708 (computed as of September 30, 2002).
3
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(UNAUDITED — AMOUNTS IN THOUSANDS)
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| Less |
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| BancTec, |
| BancTec |
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| Pro Forma |
| Pro Forma |
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| Inc. |
| Japan |
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| Adjustments |
| Consolidated |
| |||||
Revenue |
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Equipment and software |
| $ | 234,570 |
| $ | 63,041 |
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| $ |
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| $ | 171,529 |
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Maintenance and other services |
| 271,167 |
| 15,432 |
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| 255,735 |
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| 505,737 |
| 78,473 |
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| 427,264 |
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Cost of Sales |
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Equipment and software |
| 192,105 |
| 39,661 |
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| 152,444 |
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Maintenance and other services |
| 230,250 |
| 11,315 |
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| 218,935 |
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| 422,355 |
| 50,976 |
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| 371,379 |
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Gross profit |
| 83,382 |
| 27,497 |
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| 55,885 |
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Operating Expenses |
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Product development |
| 17,744 |
| 1,818 |
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| 15,926 |
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Selling, general and administrative |
| 87,661 |
| 12,438 |
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| 75,223 |
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Goodwill amortization |
| 3,215 |
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| 3,215 |
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| 108,620 |
| 14,256 |
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| 94,364 |
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Income (loss) from operations |
| (25,238 | ) | 13,241 |
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| (38,479 | ) | |||||
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Other Income (Expense) |
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Interest income |
| 893 |
| 73 |
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| 820 |
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Interest expense |
| (35,548 | ) | (21 | ) | (5 | ) | 8,250 |
| (27,277 | ) | |||||
Sundry, net |
| 21,491 |
| 563 |
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| 20,928 |
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| (13,164) |
| 615 |
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| 8,250 |
| (5,529 | ) | |||||
Income (Loss) from Continuing Operations Before Income Tax |
| (38,402 | ) | 13,856 |
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| 8,250 |
| (44,008 | ) | |||||
Income Tax Expense |
| 6,739 |
| 6,294 |
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| 445 |
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Income (Loss) from Continuing Operations |
| (45,141 | ) | 7,562 |
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| 8,250 |
| (44,453 | ) | |||||
Loss from Discontinued Operation, Net of Tax |
| (685 | ) |
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| (685 | ) | |||||
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Net Income (Loss) |
| (45,826 | ) | 7,562 |
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| 8,250 |
| (45,138 | ) | |||||
Preferred Stock Dividends and Accretion of Discount |
| (2,717 | ) |
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| (2,717 | ) | |||||
Net Loss Applicable to Common Stock |
| $ | (48,543 | ) | $ | 7,562 |
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| $ | 8,250 |
| $ | (47,855 | ) | |
The accompanying notes are an integral part of this financial statement
4
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2002
(UNAUDITED — AMOUNTS IN THOUSANDS)
|
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| Less |
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| |||||
|
| BancTec, |
| BancTec |
|
| Pro Forma |
| Pro Forma |
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|
| Inc. |
| Japan |
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| Adjustments |
| Consolidated |
| |||||
Revenue |
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Equipment and software |
| $ | 142,254 |
| $ | 40,446 |
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| $ |
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| $ | 101,808 |
| |
Maintenance and other services |
| 197,277 |
| 11,234 |
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| 186,043 |
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| 339,531 |
| 51,680 |
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| 287,851 |
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Cost of Sales |
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Equipment and software |
| 106,751 |
| 28,739 |
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| 78,012 |
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Maintenance and other services |
| 145,652 |
| 8,443 |
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| 137,209 |
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| 252,403 |
| 37,182 |
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| 215,221 |
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Gross profit |
| 87,128 |
| 14,498 |
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| 72,630 |
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Operating Expenses |
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Product development |
| 11,770 |
| 448 |
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| 11,322 |
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Selling, general and administrative |
| 53,097 |
| 9,861 |
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| 43,236 |
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| 64,867 |
| 10,309 |
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| 54,558 |
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Income (loss) from operations |
| 22,261 |
| 4,189 |
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| 18,072 |
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Other Income (Expense) |
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Interest income |
| 179 |
| 24 |
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| 155 |
| |||||
Interest expense |
| (22,636 | ) | (20 | ) | (5) | 6,188 |
| (16,428 | ) | |||||
Sundry, net |
| 4,534 |
| 16 |
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| 4,518 |
| |||||
|
| (17,923) |
| 20 |
|
| 6,188 |
| (11,755 | ) | |||||
Income (Loss) from Continuing Operations Before Income Tax |
| 4,338 |
| 4,209 |
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| 6,188 |
| 6,317 |
| |||||
Income Tax Expense |
| 3,546 |
| 1,802 |
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| 1,744 |
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Net Income (Loss) |
| 792 |
| 2,407 |
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| 6,188 |
| 4,573 |
| |||||
Preferred Stock Dividends and Accretion of Discount |
| (2,491 | ) |
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| (2,491 | ) | |||||
Net Loss Applicable to Common Stock |
| $ | (1,699 | ) | $ | 2,407 |
|
| $ | 6,188 |
| $ | 2,082 |
| |
The accompanying notes are an integral part of this financial statement
5
BANCTEC, INC., EXCLUDING BANCTEC JAPAN
NOTES TO THE PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001 AND
THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2002
(UNAUDITED — AMOUNTS IN THOUSANDS)
5. This adjustment represents a reduction of the interest expense that would have been incurred by BTI due to the assumed payoff of $82,500 in Subordinated Unsecured Sponsor Notes at January 1, 2001.
In accordance with the SEC’s guidelines for the preparation of pro forma income statement information, no pro forma adjustment has been included for the effect of any additional interest income that would have been earned by BTI. Likewise, no pro forma adjustment has been included for the effect of the gain associated with the Sale.
6